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Textile enterprises expect double-digit growth

27/04/2022 12:04 PM
The world textile and garment market has recovered strongly, and with the advantages of the free trade agreements to which Vietnam is a member are being implemented, many textile and garment enterprises have set high growth targets.

The world textile and garment market has recovered strongly, and with the advantages of the free trade agreements to which Vietnam is a member are being implemented, many textile and garment enterprises have set high growth targets.

VITAS commented: Although Covid-19 is still developing in a complicated and unpredictable way globally, Vietnam has a safe and flexible adaptation policy, effectively controlling the pandemic and recovering and developing the economy; major markets such as the US, EU... have reopened; New-generation free trade agreements are effective, so Vietnamese textile and garment enterprises will have more opportunities to expand their markets.

Ảnh minh họa.

Ambitious goal

Dap Cau Garment Joint Stock Company has just "closed" the business plan in 2022 with the goal of revenue of the whole system reaching 750 billion VND, profit reaching 22.5 billion VND, 20% dividend. Compared to the production and business results in 2021, this goal is quite ambitious, because last year, Dap Cau Garment achieved a revenue of VND 478 billion, a profit of over VND 21 billion (up 40% compared to 2020).

Having to close production factories for nearly 2 months in 2021, when the Covid-19 pandemic broke out in Bac Ninh and Bac Giang, Dap Cau Garment Company once faced the possibility of not being able to finish with the set plan. But after the production resumed, the business was able to turn the situation around, speeding up revenue, and not only maintaining profit but also growing strongly.

With a system of more than 10 member units, Hung Yen Garment Joint Stock Corporation (Hugaco) also experienced unfavorable production in the first 4 months of 2021, orders with low unit prices, processing prices down to 20 - 40%. Logistics costs increased sharply, while the USD/VND exchange rate decreased by 3%, causing the revenue of Hugaco to decrease by 15 billion dong. Overcoming difficulties, in 2021, Hugaco reached the revenue of 708.7 billion dong, reaching 122% of the plan; pre-tax profit reached VND 84.1 billion, equaling 117% of the plan.

Determining business is still difficult, because it still has to face the Covid-19 pandemic and the impact of the conflict between Russia - Ukraine, but Garment 10 Joint Stock Corporation also sets ambitious goals, when determining revenue growth of more than 10%, reaching 3,800 billion dong, profit before tax reaching 120 billion dong, an increase of nearly 30 billion dong compared to 2021. Basing on business results of 2021 and market assessment of the year In 2022, Hugoco sets a target of total revenue of VND 750 billion in 2022, and pre-tax profit of VND 80 billion.

Than Duc Viet, General Director of Garment 10, said that in 2021, the outbreak of the Covid-19 pandemic had seriously affected production and business activities of enterprises, the number of veston orders decreased by 54%. compared to 2019 (the time before the Covid-19 pandemic). Besides, logistics costs, continuously increasing freight rates, shortages of empty containers, and increasingly fierce competition for labor have increased the costs of businesses, but in 2021, Garment 10 still achieves revenue of 3,517 billion dong, profit before tax of 91.57 billion dong, up 12.5% compared to 2020.

Increasing investment to increase capacity 

To achieve business targets in the context of market fluctuations, enterprises have come up with many solutions to optimize production and business efficiency. 
Dap Cau Garment Joint Stock Company confirmed, the business will continue to invest in upgrading modern equipment, improving productivity; invest in factories and new factories in Bac Giang (expected to employ 1,500 - 2,000 employees) to increase the ability to meet orders. 

Sharing about the key strategy in 2022, Ms. Pham Thi Phuong Hoa, General Director of Hugoco said, the Company will spend 190 billion dong to invest, including innovating technology equipment; rebuilding a 5-storey warehouse and a new factory… Besides, Hugoco proposed to apply for a land fund in Hung Yen province to build apartments for employees with an investment cost of about 75 billion dong. “Labour is a great resource of enterprises. Investing to improve the quality of life and ensure the welfare of our employees has always helped us to have a stable workforce,” said Ms. Hoa. 

Meanwhile, Garment 10 Corporation is also implementing a plan to expand the factory and increase capacity to meet the needs of the export market. Specifically, the Corporation will open 3 more factories, recruit 3,000 - 5,000 more workers for projects in Thai Binh, Thanh Hoa and Quang Binh to meet the signed orders in 2022 and the coming years. 

“The Covid-19 pandemic has lasted for the third year, and businesses have also gained more experience in responding to production management. Along with that, orders for high-value suits are increasing again; Customers from the US and EU all increased their orders. This is the basis for businesses to increase growth," said Mr. Than Duc Viet.

Although the Covid-19 pandemic has not ended, thanks to the high coverage of the vaccine, production and business activities have come to life. However, the worry of businesses at this time is the knock-on effect of the "price storm" caused by the Russia-Ukraine conflict, which is forecasted to have immediate and long-term effects on the world's global production and supply chains. world as well as Vietnam.

In addition, some countries with great potential for textile and garment export such as India and Bangladesh are expanding their export activities, and some Southeast Asian countries are also prioritizing textile and garment development, thus, competing on a national level The economy continues to be a challenge for businesses. However, an advantage for the textile industry is that a series of free trade agreements to which Vietnam is a member have been implemented, opening up opportunities for businesses to increase their market share in media markets such as Europe. , Japan, UK, and at the same time opened the door to Russia, Australia, Korea, China...

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